Gifting one's business during one's lifetime

Category: 

Business Dealings & Money Matters

According to Madhhab: 

Hanafi

Reference: 

1441-119

Question: 


A father
meets with all his children while alive and verbally indicates to them that he
is giving his business to the youngest son who worked in business with him.
There were sufficient witnesses when the father addressed all his children.

In his
Will, he also stated that he bequeathed the business to this youngest son.

Is there a
Law in Shariah that indicates that the fathers verbal intention while he was
alive, superseded his written bequest in the Will?


Answer: 

If the father (after indicating and discussing with the remainder of his children) gives the entire business (which includes all stock, fixtures and fittings, etc.) to the youngest son, and he (the youngest son) accepts the business as a gift from the father, and even takes possession and control of the business (either by being given the keys of the premises by his father or by being given the title deed/ownership documents even though the documents may still legally be registered in the father’s name) then the youngest son will be considered as the owner of the shop.

The shop will not form part of the father’s estate on his demise but will belong to the youngest son from the father’s lifetime. The bequest in the Will document is then not a bequest per se in terms of Shari’ah, rather it is simply to arrange and attend to the legal transfer of the business and nothing more, or simply to reiterate that the shop belongs to the son.

In conclusion, yes, the father’s act of gifting the business during his lifetime, if carried out in accordance with Shariah as explained above, will supercede the written bequest.

On the other hand, if it was merely the father’s verbal intention to give the business to his son (as stated in your query), and formally no such gifting took place, or even if he said that he gave it as a gift, but the requirements mentioned earlier on of gifting such a business were not adhered to, then this son will not be considered to be the sole owner of the business, meaning that such a verbal intention will not supercede his Will.

AND ALLAH TA’ALA ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST

ANSWERED BY: Mufti Mohammed Desai 

CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B

Date: 16 Safar 1441 Darul Ifta Azaadville

English Date: 15 October 2019

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